George Reed Jr.: An easy fix

Not since George W. Bush pushed for privatizing part of Social Security has there been serious discussion on the system’s general health and long-term viability. But this remains a legitimate concern that will not go away by our ignoring it.

At some future time, and the exact date is debatable, Social Security payments will exceed collections, probably at some point between 2030 and 2035. That doesn’t mean the fund will "go busted" as George W. warned, but it will have for the first time what some failing businesses euphemistically might call "a negative cash flow." But that occurrence need not be a national catastrophe. There are several relatively simple changes we can make to guarantee the system’s health.

When Social Security was first instituted in 1935 the retirement age was 65. Retirees then comprised less than one percent of our population and the average life expectancy wasn’t many years beyond 65. Today’s more numerous retirees can expect to live beyond 80, but the SS retirement age hasn’t been adjusted to accommodate that reality. It is past time to raise the minimum retirement age.

Secondly, the contributions by both individuals and employers, though substantial but not onerous, can be gradually increased as they have recently been in other developed countries as their populations have aged.

Lastly, the current ceiling ($118,500) on income subject to payroll taxes can be either raised or removed without causing undue hardships on those with higher incomes. A new ceiling of $250,000 has been suggested, but that is also debatable.

There are still some Republicans who would like to see at least a portion of Social Security contributions invested in private accounts, particularly those individuals in the mutual fund business. They are licking their chops at the possibilities. But anyone entertaining that idea needs to consider one possibility. What if half of our retirement funds in 2008 had been invested in the stock market? Just think on that one for a minute. It took the market several years to recover.

Most past presidential candidates have avoided like the plague any discussion of updating Social Security. And who could blame them? On the surface it seems a sure lose-lose proposition. But Hillary Clinton has stepped forward and proposed some definite changes to shore up immediate deficiencies in the system and assure its long-term health.

Donald Trump has promised he wouldn’t cut SS benefits. But he also promises to cut income taxes while increasing military spending. Anyone believing he could do that without greatly adding to our national debt needs to also consider investing in some Florida swamp land that’s ripe for development. Could The Donald have the same financial advisors as George W. Bush, our only president to declare war and cut taxes in the same year?

We need to get real about Social Security, military spending and a lot of other things, and I think we’re finally headed in the right direction.